Identifying and reducing the money laundering risks posed by individuals who have been unknowingly recruited as money rules
| DOI | https://doi.org/10.1108/JMLC-05-2020-0053 |
| Published date | 27 June 2020 |
| Date | 27 June 2020 |
| Pages | 201-212 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Ehi Eric Esoimeme |
Identifying and reducing the
money laundering risks posed by
individuals who have been
unknowingly recruited as
money rules
Ehi Eric Esoimeme
Department of Public Law, Faculty of Law, University of Lagos,
Akoka Yaba, Nigeria
Abstract
Purpose –This paper aims to help buildawareness with financial institutions about the money laundering
risks posed by individuals who have been unknowingly recruited as Money Mules and theme assures that
financial institution scan adoptto detect illicit funds which are being received into the bank accounts of low
risk or medium risk customerswho are unknowingly recruited as “Money Mules”.
Design/methodology/approach –The research took the form of a desk study, which analysed various
documents and reports such as a 2019 report on Money Mules by the European Union Agency for Law Enforcement
Cooperation (EUROPOL); a 2019 and 2020 report on Money Mules by the Federal Bureau of Investigation (FBI) and
the Better Business Bureau (BBB); the Financial Action Task Force Guidance on the Risk Based Approach to
Combating Money Laundering and Terrorist Financing (High Level Principles and Proce dures) 2007; the Financial
Action Task Force Recommendations 2012; the United Kingdom’s Money Laundering, Terrorist Financing and
Transfer of Funds (Information on the Payer) Regulations 2017; the United States Federal Financial Institutions
Examination Council Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014; Transparency
International Corruption Perceptions Index 2018; The UK Proceeds of Crime Act 2002 (as amended); the Joint Money
Laundering Steering Group JMLSG, Prevention of money laundering/combatingterrorist financing: Guidan ce for the
UK financial sector Part I June 2017 (Amended December 2017); the United States Codified Bank Secrecy Act
Regulations (31 CFR); the Nigerian Money Laundering Prohibition Act 2011 (as amended); and the Joint Money
Laundering Steering Group JMLSG, Prevention of money laundering/combatingterrorist financing: Guidan ce for the
UK financial sector Part II: Sectoral Guidance June 2017 (Amended December 2017).
Findings –This paper determined that financial institutions may be able to prevent proceeds of crime from
being laundered by individuals who have been unknowingly recruited as Money Mule s if they focus monitoring
resources on the emotionally vulnerable customers like newcomers to the country, unemployed people who ma y
have lost their jobs because of a pandemic like COVID-19,students and those in economic hardship; pay very close
attention to the country of origin where the funds emanate from; pay very close attention to the country where the
funds are being transferred to; and pay close attention to frequent large cash deposits followed by wire transfers.
Originality/value –While most articles focus on the money laundering risk(s) associated with Money Mules
and the measures that individuals can use to ensure that their bank accounts are not used by criminals to launder
illicit funds, this paper focuses on the different mechanisms that banks can use to detect illicit funds which are
being received into the bank accounts of low risk or medium risk customers who are unknowingly recruited as
“Money Mules”. This paper recommends a proportional approach that balances anti-money laundering
measures, financial inclusion and human rights. The mechanisms/measures which have been extensively
discussed in this paper will help banks to identify, assess and understand their money laundering and terrorist
financing risks asit relates to MoneyMules and take commensurate measures to mitigate them.
Keywords Money mules, Money laundering, Cybercrime, Financial institutions, COVID-19,
Bitcoins
Paper type Research paper
Money
laundering
risks
201
Journalof Money Laundering
Control
Vol.24 No. 1, 2021
pp. 201-212
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-05-2020-0053
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